Economist: 2023 hog prices worse than 1998


December 1998 saw the lowest cash prices for hogs in U.S. history, accounting for inflation, but 2023 could be worse, according to one economist.

“It was a bloodbath,” said Dr. Steve Meyer, lead economist with Partners for Production Agriculture, referring to the December 1998 average price of $15 per live hundredweight.

Producers at that time lost almost $26 per head, he said, and this year they’re set up to lose more than $22.

“It’s a serious, serious situation,” he said.

Meyer spoke at South Dakota State University Swine Day, an annual event featuring presentations on swine industry trends and university research held at the Brookings campus Nov. 7.

The 1998 price dive came with a drop in slaughter capacity. The Dakota Pork plant that closed in Huron in mid-1997 was one of several closures across the county, contributing to an 8% dip in slaughter capacity.

Recent hog inventories are high. The Quarterly Hogs and Pigs report from U.S. Department of Agriculture in September had the number of hogs and pigs at 74.3 million, up slightly from a year ago and up 2% from June. Contributing to those high numbers are large litter sizes. All year, farmers have been setting records with the number of pigs saved per litter. 11.61 was latest averaged number of pigs weaned.

Low prices are unlikely to change without supplies decreasing, Meyer said.

He doesn’t expect producers to get much relief from production costs. Meyer predicts feed costs will remain high and insurance will be a big expense.

“It’s not a pretty sight,” Meyer said.

He expects production costs to remain between $80 and $90 per head for much of the next year. Hog prices, meanwhile, are expected to average about $60 per hundredweight for 2023 and just a dollar higher next year, according to USDA.

In 1998, poor prices caused pig farmers to go out of business. Meyer doesn’t see that happening now.

For one, the 1998 farmers who sold out were largely behind on using the top technology at the time, he said. That’s not the case now.

More so, he pointed out, nearly half the hog production in the U.S. is owned by a company with a packing plant.

Ultimately, Meyer, who plans to retire next year, predicts that the breeding herd will shrink and pork supplies will decline, but not until late 2024 or 2025.

To help producers cope with tight budgets, two Iowa State University extension experts are focused on the cost of mortality. They developed a decision tool pig farmers can use to analyze the impact mortality rates have on profitability using their own numbers.

“The models are intended to help producers get a better handle on the economic opportunity of reducing swine mortalities,” livestock specialist Russ Euken said in a news release.

Along with extension livestock economist Lee Schultz, he developed spreadsheets producers can use to analyze how mortality rate, current prices and other factors impact the cost of mortality in both wean to finish operations and in breed to wean operations.

Both are available for free through the ISU Ag Decision Maker website,